Focus on, “1 Philosophy to Grow your Business”
Let’s face it, the internet is a great place to source ideas. In one moment and with a few keystrokes you can find any information you want online. Quick, simple, convenient…yet oftentimes, ineffective in answering your actual deeper question. Let us take this search query as an example “10 Ways to Grow Your Business”.
1. “10 Ways To Grow Your Business”
What this search query returns is no shortage of articles,
- Entrepreneur.com: 10 Ways to Grow Your Business
- Entrepreneur.com: 15 Ways to Grow Your Business Fast
- Smallbiztrends.com: 9 Things You MUST Do Today to Grow Your Small Business
- Smallbusiness.wa.gov.au: 8 ways to grow your business
- Bplans.com: 16 Ways Grow Your Business Without Spending Money
- Thebalancesmb.com: How to Transform Your Small Business Into a Big Business
- Iqoffice.ca: 10 Ways to Grow your Business
- Waveapps.com: 10 ways to grow your business organically
- Investopedia.com: 9 Tips for Growing a Successful Business
Generally speaking, these articles are filled with painfully obvious advice and ideas. Things like build a franchise, open a second location, expand globally, create a customer loyalty program, target new markets, innovate your product or service, expand your business network, leverage social media, etc.
2. Why This Might Not Be The Advice You Need
Now, although these nuggets of advice do hold some merit – they do not answer your question. Here’s why:
Not all businesses are equal. Not all businesses have the same business model. Not all businesses are in the same industry. Not all businesses are in the same life cycle stage. Lastly, not all businesses are scalable in the same way…you get it. So, general advice to scale globally, franchise or open a second location is nothing more than arbitrary food for thought and not sound business advice that has been adequately rationalized.
Even if these nuggets of advice might have answered your question to some degree, they will not efficaciously answer your question. Here’s why:
The problem with common knowledge is that it is in itself, common.
Here is an interesting thought from Peter Thiel’s book, Zero to One “Each of the casualties [referring to failed cleantech companies] has described their bright futures using broad conventions on which everybody agreed. Great companies have secrets: specific reasons for success that other people don’t see”. He continues to explain that “The best projects are likely to be overlooked, not trumped by a crowd; the best problems to work on are often the ones that no one else even tries to solve”.
Now, although Peter Thiel is referring to well-funded cleantech companies and startups aimed at shaping the future. The principle remains valid for businesses from all industries and of all sizes. Don’t count on common knowledge or social conventions to differentiate your business, product or service. Therefore, the efficacy of any “common knowledge” advice misguides the reader away from what they really need to understand.
3. “1 Philosophy To Grow Your Business”
You can’t be good at everything, period.
This is because striving for all-around excellence leads directly to mediocrity. Achieving service excellence requires underperforming on the things your customers value least, so you can over-deliver on the dimensions they value most. Decide what trade-offs you will make – where you will do things badly, even very badly, in the service of great – based on deep insight into who your customers are and what they need operationally. Then be unapologetic about it.
Let’s say that you ignore this advice and decide to shoot for the moon in all aspects of your business. Then we must consider that, someone has to pay for it. Great service must be funded, or you risk giving it away. Either find a palatable way to charge your customers for it, reduce costs while improving the experience, or get customers to do some of the work for you. Choosing among these strategies will depend on both industry dynamics and the specific relationship you have with your customers.
This singular philosophy comes from a book called Uncommon Service, by authors and experts Frances Frei and Anne Morriss. Uncommon Service focuses on customer centricity and explains how to win by putting customers at the core of your business. Revealing that companies must design excellence into the very fabric of the organization. Not only is this book off the Harvard Business Review Press, but it also forms part of the curriculum for numerous MBA programs worldwide.
4. How To Make This Work For You
In their book “The Discipline of Market Leaders” Michael Treacy and Fred Wiersema argue that no company can succeed today by trying to be all things to all people. It must instead find the unique value that it alone can deliver to a chosen market. This is quite in line with Porter’s Generic Strategies in which Porter describes how companies gain competitive advantage by either focusing on low cost (cost leadership), differentiation or a niche market. If a company tries to pursue all of these strategies, it is likely to end up somewhere ‘stuck in the middle’ offering average products for average prices. Similarly, Treacy and Wiersema suggest three “Value Disciplines” to choose from which should act as a central piece that shapes every subsequent plan and decision a company makes. These three value disciplines are: Operational Excellence, Customer Intimacy and Product Leadership.
The term “operational excellence” describes a specific strategic approach to the production and delivery of products and services. The objective of a company following this strategy is to lead its industry in price and convenience. Companies pursuing operational excellence are determined in seeking ways to minimize overhead costs, to eliminate intermediate production steps, to reduce transaction and other “friction” costs, and to optimize business processes across functional and organizational boundaries. They focus on delivering their products or services to customers at competitive prices and with minimal inconvenience. Because they build their entire businesses around these goals, these organizations do not look or operate like other companies pursuing other value disciplines.
While companies pursuing operational excellence concentrate on making their operations lean and efficient, those pursuing a strategy of customer intimacy continually tailor and shape products and services to fit an increasingly fine definition of the customer. This can be expensive, but customer-intimate companies are willing to spend now to build customer loyalty for the long term. They typically look at the customer’s lifetime value to the company, not the value of any single transaction. This is why employees in these companies will do almost anything—with little regard for initial cost—to make sure that each customer gets exactly what he or she really wants.
Companies that pursue the third discipline, product leadership, strive to produce a continuous stream of state-of-the-art products and services. Reaching that goal requires them to challenge themselves in three ways. First, they must be creative. More than anything else, being creative means recognizing and embracing ideas that usually originate outside the company. Second, such innovative companies must commercialize their ideas quickly. To do so, all their business and management processes have to be engineered for speed. Third and most important, product leaders must relentlessly pursue new solutions to the problems that their own latest product or service has just solved. If anyone is going to render their technology obsolete, they prefer to do it themselves. Product leaders do not stop for self-congratulation; they are too busy raising the bar.
5. Way Forward
Now you have a strategic decision to make. It’s a choice between three options, which seems simple enough. But make no mistake, this three-way choice has the power to scale your business to new heights or leave your business on the scrap pile. Before making this strategic decision, you will have to consider the status quo of your business, the industry you exist in, your customers, your competitors, macro-economic trends, etc. Furthermore, you will have to weigh these considerations up against time – where do you want your business to go, where you see the industry going, are customer preferences changing, etc.
Parting recap – You can’t be good at everything. You need to underperform on the things your customers value least, so you can over-deliver on the dimensions they value most. Keep this in mind, then make your decision. Who knows, perhaps in time you will scale globally, franchise or open a second location…but remember where you started 🙂
This article was produced courtesy of the ClockInstant team,
ClockInstant is a startup that focusses on productivity growth solutions for SMME’s in emerging markets. Our simple, single feature, one-click time tracking solution allows employers to track staff anywhere ensuring they are on time, in the right place, at the right time.